### Summary
The caretaker government in Pakistan has several key challenges to address, including managing the economy, stabilizing the currency, ensuring energy security, and attracting foreign investments.
### Facts
- 📉 The transition period until the next elections is expected to last five to six months, and the caretaker government must not be complacent in addressing economic issues.
- 🧱 A capable team, including a central banker, a veteran bureaucrat, and an expert planning commissioner, has been appointed to lead the Special Investment Facilitation Council (SIFC) and tackle political interference.
- 💱 The depreciation of the Pakistani rupee against the US dollar is a concern, and measures should be taken to discourage hoarding and build up net international reserves.
- ⚡️ Energy security is critical, and immediate actions should be taken to ensure full recovery of costs in the gas and power sectors. Direct cash transfers and full recovery of taxes in the electricity and fuel prices may be necessary.
- 💸 Negotiating a new IMF program is expected after the current program expires, and efforts should be made to attract investments from friendly Arab countries under the SIFC.
- 📊 Improving the fiscal side of the economy is essential, including widening the tax net, targeting untaxed income, and digitizing the tax collection process.
- 🗳 The caretaker government should focus on effective governance and decision-making, setting an example for the next government. The cabinet's performance will be judged on how well they manage the economy.
- 🌍 Restoring confidence in Pakistan's economy and addressing key indicators such as investments, inflation, fiscal prudence, and circular debt are essential for a stable future.
Note: The text provided contains a mention of the publication date (August 21st, 2023). Since it is already past this date, some information may be outdated.
The International Monetary Fund (IMF) has approved the disbursement of $7.5 billion for Argentina after completing the fifth and sixth reviews of their $44 billion program, bringing the total disbursements to $36 billion, with most of the cash being used to pay back the fund for another program.
Pakistani authorities have requested the IMF to review the condition of keeping the difference between interbank and open market dollar rates below 1.25% due to the continuous fall in the exchange rate.
Caretaker Finance Minister Shamshad Akhtar has assured the International Monetary Fund (IMF) of steadfast implementation of policy actions committed under the $3bn Standby Arrangement in order to maintain economic stability during the tenure of the caretaker government.
Former finance minister Miftah Ismail reveals that the caretaker government in Pakistan must seek permission from the International Monetary Fund (IMF) before giving relief to consumers facing inflated electricity bills, and urges political leadership to come up with a strategy to collect taxes from the rich.
Pakistan's recent financial aid and investment partnerships, including with the IMF, Saudi Arabia, UAE, and China, provide temporary relief from economic challenges, but the country must address issues such as low growth, high inflation, unemployment, and limited foreign exchange reserves through deregulation, investment in education and technology, tax reform, privatization, and political stability to achieve lasting prosperity.
The Pakistani government is seeking approval from the International Monetary Fund (IMF) before announcing any immediate relief for consumers protesting against inflated electricity bills, with relief likely to be provided to those using up to 400 units per month for August and September.
The relentless surge in pressure on the exchange rate and price level in Pakistan over the past two and a half years can be attributed to serious malfunctions on the balance of payments and fiscal accounts, which have thrown the monetary aggregates far from their projected path to stability. This has led to inflation and exchange rate pressure, and traditional IMF-mandated adjustments alone may not be enough to resolve the situation.
The International Monetary Fund (IMF) has not granted assent to Pakistan's request for deferment of electricity bills, leading to a failure to provide relief to power consumers within the stipulated 48-hour deadline given by the caretaker Prime Minister.
The IMF has rejected Pakistan's proposal for tariff adjustment or additional subsidy, making it more challenging for the country to manage its economic challenges amidst rising inflation.
The rupee rebounded in the open market as a crackdown on the informal currency market helped narrow the gap between interbank and open-market rates, bringing it closer to the IMF's target of 1.25%. The State Bank of Pakistan has also introduced structural reforms for exchange firms and increased the minimum capital requirement, while ordering banks to set up separate entities for forex transactions.
The International Monetary Fund (IMF) and World Bank have pledged to increase their cooperation in addressing climate change, debt vulnerabilities, and digital transitions, stating that they are well-positioned to contribute to tackling these challenges.
Pakistan's interim government is prioritizing economic revival and fulfilling international obligations, including agreements with the International Monetary Fund (IMF), to address the stagnant economy and financial issues. They aim to improve the overall business and investment environment, increase inflow of dollars from multilateral institutions, and reduce expenditures while upholding international agreements.
India will evaluate the recommendations made by the IMF and the FSB on regulating crypto assets before deciding its stance, according to Ajay Seth, the secretary of the department of economic affairs.
The World Bank emphasizes the importance of collaboration between federal and provincial governments in Pakistan to secure the disbursement of $2 billion in program and project loans, contingent on meeting agreed-upon indicators, for the current fiscal year.
Pakistan's central bank is expected to increase interest rates in order to address high inflation and bolster foreign exchange reserves, which have led to a record low value for the rupee. A Reuters poll shows that 15 out of 17 analysts are forecasting a rate hike, with some expecting an increase of at least 150 basis points. The country's economic recovery is being challenged by IMF loan conditions, import restrictions, and subsidies removal, which have caused spikes in energy prices and elevated food inflation.
Argentina and the International Monetary Fund (IMF) face challenges as the country enters a recession, misses economic targets, and struggles with inflation, prompting calls for stricter conditions and deeper structural reforms from the IMF.
The International Monetary Fund (IMF) plans to advise China to address issues such as weak domestic consumption, the troubled real estate sector, and local government debt, in order to boost both Chinese and global growth, according to IMF Managing Director Kristalina Georgieva. The IMF will urge China to shift its growth model away from debt-driven infrastructure investment and real estate and focus more on domestic consumption. China's aging population, falling productivity, and problems in the real estate sector are factors hindering its growth rate. The IMF is set to release new global growth forecasts, reflecting concerns about low GDP growth worldwide, with the United States being the only major economy to have recovered pre-pandemic levels. China's growth rate is crucial for both Asia and the rest of the world, given its significant contribution to global growth. However, there is a trend of some outflow from China, which needs to be monitored.
The International Monetary Fund (IMF) has expressed concerns about the rampant smuggling of petroleum products in Pakistan, which costs the country Rs10 billion annually and is being used as a key source of financing for terrorists, calling for increased vigilance and security measures at the borders.
Egypt and the International Monetary Fund (IMF) have agreed to merge the first and second reviews of Egypt's economic reform program, which had been delayed due to concerns over Egypt's progress in meeting the IMF's terms.
The International Monetary Fund (IMF) did not reach an agreement with Sri Lanka in their first review of a $2.9bn bailout package due to concerns about a potential shortfall in government revenue generation, according to the lender.
Pakistan is likely to receive the next tranche of the IMF stand-by arrangement, despite missing some targets, according to a brokerage report, as the country has met certain criteria such as net international reserves and foreign currency positions. However, the report noted that Pakistan has yet to implement the gas price adjustment agreed with the IMF, which was a prior action for the completion of the second review of the program.
The International Monetary Fund (IMF) predicts that fears of a global recession caused by the Ukraine war and a cost of living crisis are unfounded, as global growth has shown resilience, although it warns against central banks cutting interest rates too quickly.
The International Monetary Fund (IMF) has maintained its global growth forecast at 3.0% for 2023, despite cutting its growth forecasts for China and the euro area; the IMF also raised its growth forecast for the United States but expressed concerns about risks related to real estate crisis in China, volatile commodity prices, geopolitical fragmentation, and a resurgence in inflation.
The International Monetary Fund (IMF) expects global economy to expand by 3% in 2023, but warns that growth remains weak and risks are tilted to the downside, with weaker recoveries expected in Europe and China, while inflation is projected to remain high and commodity prices pose a serious risk.
The International Monetary Fund (IMF) expects Pakistan's economy to perform better than expected, with a growth of 2.5% this year and 5% in the next fiscal year, despite macroeconomic challenges, surpassing projections from other multilateral agencies. The IMF also maintains a global growth forecast of 3% for this year but warns of high inflation and downgrades outlooks for China and Germany.
Property and lending crises in China, including developer debt and the failure of local government financing vehicles to repay loans, could have far-reaching impacts on the domestic economy and global stability, warned the International Monetary Fund (IMF). Without action, these issues could disrupt the soft landing of the global economy and exacerbate the property sector downturn, leading to financial and economic strain. The IMF called for a comprehensive strategy to address China's local government debt problem, as well as measures to restore confidence in the property market.
The International Monetary Fund (IMF) has stated that Middle East economies are gradually recovering, but the war between Israel and Hamas could impact the outlook, especially in the oil markets; the IMF expects economic growth in the region to slow to 2% this year but improve to 3.4% in 2024.
Pakistan's central bank has met its forward book target of $4.2 billion set by the IMF and is positioned well to meet additional targets, while an IMF delegation is set to evaluate the country's performance and potentially approve the next installment of $700 million in financial assistance.
The International Monetary Fund (IMF) has advised Nigeria to collect more taxes in order to fund the national budget and pay public debts, as the removal of fuel subsidies and foreign exchange unification alone will not lead to economic growth and stability; the IMF also recommended that Nigeria and other sub-Saharan African countries should look for funding domestically as foreign loans are becoming scarce and costly.
Pakistan's external financing needs are significant and its foreign exchange reserves coverage is precarious, warns the IMF, who also highlights the growing risk to Pakistani banks from a large exposure to government debt.
The Pakistani rupee is expected to gain further strength against the US dollar as the next IMF review approaches, with analysts predicting continued appreciation in a controlled environment. The IMF review in November will determine if the rupee's performance can be sustained, and the currency has already experienced a 1.43% rise over the last five sessions.
The International Monetary Fund (IMF) is urging countries in the Middle East and North Africa to reduce their dominance over their local economies and implement measures such as leveling the playing field between public and private firms, providing more targeted social assistance, and revamping education and training systems. The IMF also called for greater participation of women in the workforce and the use of green investments for job creation.
The IMF has acknowledged the pressure on Nigeria's currency and stated that Nigeria is eligible to request a loan from the Fund to stabilize the currency if it deems it necessary, while also endorsing recent currency changes made by the Nigerian government.
The International Monetary Fund (IMF) warns that China's weak economic recovery and the risk of a prolonged property crisis could negatively impact Asian economies, especially those that export raw materials to China, while the strength of the U.S. economy provides less support to the region due to its service industry-focused growth. Additionally, the IMF highlights the potential impact of Japanese financial policy changes on other countries, particularly if further actions are taken by the Bank of Japan.
